Although Middle-Earth Online generated a fair amount of excitement when it was first announced, news since then has been noticeably scarce. This is because the project has been in limbo. Sierra's Yosemite department, then responsible for developing the game, was closed, forcing the team to move. However, Sierra was not impressed with their progress, so the development team got fired. Despite the company's assurances, it was largely assumed that the project was dead.

The Associate Producer at Universal Interactive finally made stated that the development was going ahead, although the project is taking a new direction. The game had stirred some interest by its apparent permanent death feature - most MMORPGs respawn players' avatars if they are killed. This is one of the things that the new team has dropped. Also, it has been indicated that the game's title might be changed to a name more reminiscent of The Lord of the Rings.

Some details on the gameplay have emerged, as well. The main focus of the action will be pitting the player against computer elements, but developers are also hoping to break some ground with the player-versus-player system. Humans, Elves, Dwarfs, and Hobbits will be the races players can select for their avatars; (sorry Orc fans!) and the classes will feature extensive skill trees. As for the storyline, the game will take place during Tolkien's Third Age, which is roughly the timeframe of the LOTR trilogy. This is somewhat unfortunate, because many fans were hoping for the chance to visit some of the other time periods detailed in the writer's many works.